PremiumListen to this article |
Pakistan, which is reeling under a severe economic crisis, has now planned to sell shares of government-owned entities to friendly countries. However, the cash-starved country will sell shares of the listed state-owned entities with a buyback option to reduce a part of the $4 billion financing gap estimated by the International Monetary Fund (IMF) for the Financial Year 2022-23.
According to a report by Dawn newspaper, Pakistan Finance Minister Miftah Ismail has decided to amend the laws for the sale of shares of listed state-owned entities. Besides, the Pakistan government is also planning to sell two state-owned LNG-based power projects--Balloki and Haveli Bahadur Shah -- to friendly countries in order to overcome the financial crisis.
The Pakistan financial minister cited 'bad management' and 'poor governance' as the key reasons behind the sale of state-owned entities. He said most of the state-owned entities had professional people running them, but still, they were not performing the way they should be. he said that the laws and governance structures were restricting their performances. "Therefore, the country perhaps needed better law and governance structures to make such entities perform or better ways to expedite their privatisation," the Pakistan minister said in a report in Dawn newspaper. He also added that there had been no progress on privatisation either over the past decades.
Further, he said Pakistan is facing LNG shortages because the ministers and officers in the previous government were afraid of the National Accountability Bureau (NAB) and its law to take decisions and book future orders. "NAB has been in place for 20 years but the level of corruption or perception of it did not go down," he said.
Though the Minister did not name the friendly countries, Pakistan has close relations with nations such as China and Saudi Arabia which have doled out huge assistance to Islamabad during its financial woes. he clarified that Pakistan is only selling shares traded at the stock exchange and only a little bit of each of them. "We are not selling majority shares or ownership shares and we are selling a small number of shares on buyback option," he said.
“He said the government could buy back those shares at a later stage if it so desires with improved economic conditions," the report said. Pakistan could face a serious economic problem as its foreign exchange reserves are depleting fast amid rising external debt servicing.
With the rising current account deficit at $17.406 billion, Pakistan required financial assistance of $9-12 billion till June 2022 to avert further depletion of foreign currency reserves.
